Sales were higher on a year-over-year basis, led by a $4.8 billion, or 5.6%, increase in vehicle sales. Non-store sales were next with a $4.5 billion, or 9.6%, increase. Building and garden supply store sales have also been strong and were up $1.5 billion, or 5.2%, from a year ago. Only two categories were down from a year ago, led by a $528 million, or 6.9%, decline in sports and hobby stores. Department store sales were also down by $518 million, or 4.0%.
Despite all of the weak May data, the Federal Reserve raised interest rates in June. Today’s retail sales report, along with another month of weaker than expected inflation data for June, suggests the June rate hike was probably not a wise move. If the weakness in housing data that we saw in May continued in June as well, criticism of the Fed may ramp up.